Human bladder and ureter cells and mouse epidermal cells are being used for studying the mechanism of chemical carcinogenesis in epithelial cells. Serum-free media have been developed for both systems: low levels of calcium and substitution of serum by hormones and growth factors were found to be essential. Increase in calcium or addition of serum induced terminal squamous differentiation in both systems. Both systems are now being extensively characterized by electron microscopy, karyology, growth response to various factors and by their complement of structural proteins and enzymatic activities. Chemical transformation experiments will be conducted when these systems are adequately characterized.